Tardif Corporation adjusts its books monthly On September 30

Tardif Corporation adjusts its books monthly. On September 30, 2015, notes receivable include the following: Maker Principal Interest Term Issue Date Mar. 31, 2015 RES Inc. May 31, 2015 Ihara Ltd Aug. 31, 2015 Dragon Limited Sept. 30, 2015 MGH Corp 7 months 18 months 2 months 16 months 5% $15,000 20,400 5,500 6% 5% 19,600 Interest is due at maturity for the RES and Dragon notes. Interest is due on the first day of the month for the Ihara and MGH notes. At September 30, the balance in the Allowance for Doubtful Notes account is nil. In October, the following selected transactions were completed 1 31 Received notice that Dragon was unable to pay its note as scheduled. It expects to be able to pay in the future 31 The RES note matured and was received in full 31 Accrued interest on the Ihara and MGH notes 31 Analyzed the remaining notes for collectibility. Estimated that $20,400 of notes may not be collectible in the future because of significant labour issues currently Oct. Received the interest due from Ihara and MGH being experienced by Ihara ? (a) Calculate the balance in the Interest Receivable and Notes Receivable accounts at September 30, 2015. (Round answers to O decimal places, e.g. 5,275.) Balance in the Interest Receivable Balance in the Notes Receivable

Solution

SOLUTION

Calculation of balance in interest receivable and notes receivable at September 30,2015-

Balance in Interest receivable = $878.5

Balance in Notes receivable = $60,500

Issue date	Maker	Principal	Interest rate	Term	Interest receivable	Calculation
March 31	RES inc.	$15,000	5%	7 months	375	15,000*5%*6/12
May 31	Ihara Ltd.	$20,400	7%	18 months	476	20,400*7%*4/12
Aug.31	Dragon Limited	$5,500	6%	2 months	27.50	5,500*6%*1/12
Sept.30	MGH Copr.	$19,600	5%	16 months	0
Total		$60,500			878.5